Exhibit 99.1
INDEPENDENCE AIR
For Immediate Release Contact: Rick DeLisi
February 22, 2005 Director, Corporate Communications
Page 1 of 3 (703) 650-6019
FLYi, Inc. Announces Successful Completion
of Financial Restructuring
Company's Liquidity Position Greatly Enhanced;
Additional Financial Flexibility Strengthens Low-Fare
Strategy
Dulles, VA, (February 22, 2005) - FLYi, Inc. (NASDAQ/NM:
FLYI), parent of low-fare airline Independence Air,
announced today that it has successfully completed its
financial restructuring, providing the company with greater
financial flexibility to execute its low-fare business plan.
The restructuring includes agreements with a majority of the
company's aircraft creditors to reschedule aircraft rent
payments and reduce the total number of 50-seat CRJ aircraft
in the company's fleet, while continuing to add more 132-
seat Airbus A319 aircraft.
"Today's announcement represents an important step forward
in building a much stronger future for Independence Air,"
said Kerry Skeen, Chairman and CEO. "Working together with
our creditors, we have put in place a capital structure that
greatly enhances our liquidity as we continue to move
forward with our low-fare strategy. We sincerely appreciate
the commitment and support of our lessors and lenders who
have demonstrated their confidence in our business plan with
these agreements."
Highlights of the restructuring include:
Consensual lease terminations on 24 CRJ aircraft,
almost all of which will be returned during the first and
second quarters of 2005. Together with previously announced
changes these lease terminations will result in the company
operating a fleet of 58 CRJ aircraft. Many of the
operational changes resulting from this fleet reduction are
already reflected in the company's February and March
service schedule. These lease terminations will reduce the
company's payments during the period from January 2005
through February 2007 by $81 million.
Deferral of $70 million in CRJ rent payments that would
have been due between January 2005 and February 2007. These
deferred payments will now be repaid on a monthly basis
beginning in May 2006.
FLYi, Inc. Announces Successful Completion of Restructuring
Page 2 of 3
Lease termination on 21 of the company's 30 J-41
turboprop aircraft. These aircraft were previously retired
from the company's operating fleet and are not currently
used in Independence Air operations. These lease
terminations will reduce the company's net payments during
the period from January 2005 through February 2007 by $13.5
million.
FLYi has also finalized and drawn down its previously
announced five-year $16 million secured term loan with GE
Commercial Aviation Services, Inc. and certain of its
affiliates ("GECAS").
In exchange for concessions from aircraft financing
parties, the company agreed to issue approximately 8.3
million shares of FLYi stock, some of which are issuable
under convertible non-interest bearing notes, and
approximately $6.1 million in unsecured notes.
As previously announced, the company sold four CRJs in
December 2004 for approximately $50 million. In order to
complete this transaction, the company applied approximately
$30 million of deposits with Bombardier to pay down an
interim loan on two of the aircraft in order to release
liens prior to the sale of these aircraft.
As a result of concluding its restructuring efforts, on
February 18, 2005 the company paid the trustee the interest
owing under its 6% Convertible Notes due 2034, and the note
trustee has commenced the process of paying this interest
over to the noteholders.
The company will provide additional details about its
restructuring through filings on Form 8-K with the
Securities & Exchange Commission.
Mr. Skeen continued, "This financial restructuring, together
with the many other cost reduction and revenue enhancing
initiatives that we are undertaking, strengthens our company
as we continue to offer the benefits of low-fare service to
our growing base of over three million customers. We are
especially excited to roll out transcontinental service to
Las Vegas and five major West Coast cities using our new and
growing fleet of Airbus A319 aircraft. In the eight months
we've been operating as an independent, low-fare carrier,
Washington Dulles has become the largest low-fare hub in
America in terms of total departures and we remain
encouraged by the strong customer response to our Florida
service." He added, "Above all, we are so proud of each of
our employees, who continue to receive rave reviews from
FLYi customers for providing the highest level of
enthusiastic service every day."
FLYi, Inc. Announces Successful Completion of Restructuring
Page 3 of 3
The company currently operates six Airbus aircraft and will
take delivery of six more in the coming months for a total
of 12 A319s scheduled for service by late May. Sixteen
additional A319s are on order for deliveries in 2006 and
beyond-for a total of 28. Independence Air currently
operates non-stop Airbus service between Washington Dulles
and four destinations (Orlando, Tampa, West Palm Beach, and
Fort Myers) and will initiate new Airbus service from
Washington to six additional destinations between March 1st
and May 1st (Las Vegas, San Diego, San Francisco, Los
Angeles, Seattle and San Jose). Independence Air currently
offers non-stop low-fare service to a total of 40
destinations.
The company will hold a webcast and conference call this
morning (February 22, 2005) at 11:00 am Eastern time to
discuss its restructuring and recent changes to its business
plan, including; the growing reliance on Airbus A319
aircraft which allow it to provide transcontinental service
and the use of third party distribution systems Travelocity,
Orbitz, Sabre, Worldspan and Galileo/Apollo-which allow a
broader spectrum of customers to access Independence Air
flights, including business travelers looking for new
alternatives to the fares and service offered by legacy
carriers.
To access today's webcast, please visit www.FLYi.com, go to
"Company" and then "Investor Information." The webcast will
be available for replay at the same site, beginning
approximately three hours following its conclusion.
# # #
This press release contains forward-looking statements and
is made as of February 22, 2005, and the company undertakes
no obligation to update its disclosures, whether as a result
of developments in its efforts, or as a result of any other
new information, future events, changed expectations or
otherwise, prior to its next required filing with the
Securities and Exchange Commission. Such forward-looking
statements are subject to risks, uncertainties, assumptions
and other factors that may cause the actual results of the
company to be materially different from those reflected in
such forward-looking statements. Such risks and
uncertainties include, among others: the ability of the
company to effectively implement its low-fare business
strategy utilizing regional jets and Airbus aircraft, and to
compete effectively as a low-fare carrier, including
passenger response to the company's new service, and the
response of competitors with respect to service levels and
fares in markets served by the company; the ability to
expand the company's customer base through third party
distribution services; the ability to successfully and
timely complete the acquisition of its Airbus aircraft, and
to successfully integrate these aircraft into its fleet; the
effects of high fuel prices on the company; the ongoing
deterioration in the industry's revenue environment; and
general economic and industry conditions; and other risk
factors that are more fully disclosed under "Management's
Discussion and Analysis of Financial Condition and Results
of Operations" in the company's Form 10-K for the year ended
December 31, 2003, its Quarterly Report Form 10-Q for the
period ended September 30, 2004 and in subsequently filed
Forms 8-K.